Can They Beat Their Gas-Paying Competitors?

As blockchain technology and cryptocurrencies continue to garner widespread popularity and adoption, the persistent fluctuation and spike of gas fees on layer 1 blockchains like Ethereum have become worrisome to developers and users.

However, with numerous existing blockchain projects, the terms “Layer 1” and “gas fees” can be confusing if you lack some background knowledge or context. So, in this piece, we discuss Layer 1 blockchains and their gas fees.

What is a Layer 1 Blockchain?

Layer 1 blockchains or base layer chains or mainnets are standalone blockchain protocols. That is, they are not built on any other blockchain network and provide the foundational layer for a blockchain ecosystem. Therefore they are responsible for managing the blockchain’s basic functions like consensus, mining, and transaction processing.

These blockchains are decentralized, secure, and immutable and often feature a native token that rewards validators or miners that maintain the ecosystem. Layer 1 blockchains also support smart contracts, DeFi, and dApps, while providing a secure and transparent approach to storing and exchanging data. Examples include Ethereum, Cardano, Avalanche, Solana, Binance Smart Chain (BSC), etc. 

However, transactions on these blockchains often incur gas fees, which have become a hot topic in the blockchain space over time.

Layer 1 Gas Fees Explained

Gas fee is the amount paid to process a transaction on a blockchain network. Layer 1 gas fees are transaction costs associated with processing transactions on the mainnet of a blockchain ecosystem.

They are measured in the blockchain’s native currency. For example, gas fees on the Ethereum blockchain are paid in Ether (ETH) and are used to reward validators for processing and validating transactions. 

Gas fees are calculated based on the transaction’s complexity. The more complex a transaction is, the more gas it requires, summing up to a higher fee. Other factors affecting the fluctuation of gas fees on Layer 1 blockchains include demand for transactions, network congestion, and current gas fee. Gas fees increase with higher demand and congestion and reduce with lower demand. Below is a comparison of the leading Layer 1 blockchains and their current gas fees:

Ethereum

Ethereum is the leading blockchain network in terms of smart contract functionality. However, its popularity has increased traffic on the blockchain network, leading to notoriously high gas fees, which most users have criticized. Even after its switch from a proof-of-work (PoW) consensus to a proof-of-stake (PoS) model, gas fees on the blockchain continue to spike.

At the time of writing, the average cost to execute a simple transaction on Ethereum ranges between 80-100 Gwei. However, during periods of high congestion, the cost of gas on Ethereum can easily exceed 500 Gwei.

Binance Smart Chain (BSC)

BSC is a Layer 1 blockchain solution that leverages its PoS model to provide faster and cheaper transactions than Ethereum. The blockchain is also popular due to its smart contract functionality. 

BSC offers lower gas fees and enhanced throughput, making it appealing to developers and users. At the time of writing, the average gas fee on BSC is between 5 Gwei and  10 Gwei per transaction. However, BSC is criticized because it is more centralized than Ethereum. The blockchain is controlled by Binance, the largest centralized cryptocurrency exchange.

Exploring Gasless, More Innovative Layer 1 Solutions

Gasless layer 1 blockchains are innovative solutions that do not charge users gas fees to process transactions. While relatively new and not widely adopted, this blockchain model is gradually gaining traction. 

For example, established blockchains like Solana and Avalanche are already implementing gasless transactions to solve the scalability challenges older blockchain solutions encounter. However, they are not alone, as newer Layer 1 blockchains like ReserveBlock and Metatime have already adopted a gasless approach.

ReserveBlock

ReserveBlock is an open-source, decentralized, autonomous, and peer-to-peer (P2P) layer 1 blockchain governed by validators through on-chain voting. ReserveBlock uses a liquid Proof of Assurance (PoA) consensus to democratize mining without the burdens and frictions associated with the PoW or Proof of Stake PoS consensus models. The network is gasless and has no lockups or holding periods. In addition, the development team has also announced that the project will be listed on MEXC on 10 March 2023.

Conclusion

Different Layer 1 blockchains have different gas fees. While Ethereum’s gas fees are the highest because of its popularity and network congestion, Avalanche, BSC, aims to offer lower gas fees and faster throughputs.

Users should avoid using networks during high congestion to significantly lower gas fees. They can also use a gas fee estimator to determine optimal transaction fees. In addition, developers can optimize smart contracts to use resources efficiently, reducing gas fees.

However, gasless Layer 1 blockchains offer users a user-friendly, convenient, and cost-effective experience. With these solutions, users do not have to worry about incurring extra transaction fees when transacting on the blockchain. But, being in their earliest stages, these gasless blockchains may have security challenges.

As with any Layer 1 blockchain, weighing their pros and cons before using them for transactions or applications is critical.

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